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Bank Scandal

Chur, Switzerland: (Sep-27-07) Italian dairy giant Parmalat filed a lawsuit against Graubuendner Kantonalbank, a Swiss bank, seeking damages after the company collapsed in a 2003 fraud scandal. Parmalat Finanziaria SpA collapsed in 2003 under billions of dollars of debt following an accounting scandal. In 2005, a restructuring plan, known as a Concordato, was approved. It created Parmalat SpA, sometimes referred to as New Parmalat. Parmalat demanded $47.6 billion, in 2005, through a special Swiss procedure that does not involve a court. Sources claimed that after being rejected, it filed a lawsuit in Italy seeking $6.6 billion in damages.

In a recent development, the Swiss bank agreed to pay out $30 million to Parmalat. The Italian company has agreed to withdraw its claims against the bank as part of the settlement. The regional bank said the payment would not affect its operative annual results for 2007, because the money would come from funds already set aside for the case and for other, general banking risks. The settlement has no effect on ongoing criminal investigations in Switzerland and Italy into Parmalat's collapse. [FORBES: BANK SCANDAL]

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Published on Sep-28-07


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